Posted by The Baze on June 04, 2000 at 11:28:08:
Pete,
First off, turn off the all caps, and use some punctuation. Makes it easy to read. OK then, since you purchased these houses w/ the intention of rehabbing and flipping them, they are not subject to capital gains treatment. The profit will be taxed at your ordinary income rate. As far as the costs you paid to the handymen off the books, that’s your call. They’re deductible, but if you were to get audited, how would you prove you paid them? No receipts, no cancelled checks, makes it tough. As has been discussed before, a corp is the better entity for doing flips. See the thread further down the board which discusses that exact issue.
Tom Bazley